The US Office of Government Ethics (OGE) has ordered federal employees to report their holdings of virtual currency, according to new guidance[1] issued June 18. The guidance will affect around 2 million[2] federal executive branch employees, including the Departments of Homeland Security, the Army, Justice, Veterans Affairs, and others.
According to the notice, the OGE “does not consider virtual currency a ‘real’ currency or legal tender.” The reporting and conflict principles set out in the guidance will apply equally to digital assets like “coins” and “tokens[3],” which were received within initial coin offerings[4] (ICOs) or issued or distributed employing blockchain[5] technology. It states:
“Filers report their holdings in a virtual currency if the value of the virtual currency holding exceeded $1,000 at the end of the reporting period or if the income produced by the virtual currency holding exceeded $200 during the reporting period. Filers are required to identify the name of the virtual currency and, if held through an exchange or platform, the exchange or platform on which it is held.”
The development of guidance was deemed essential because, “virtual currencies are experiencing a surge in use and access, and as a result, employees who hold virtual currencies are increasingly seeking guidance from their ethics officials concerning their financial disclosure reporting obligations.”
Public filers are required to report transactions of certain investment assets, i.e. different forms of securities, although the notice says that the requirements will depend on whether a particular digital asset is recognized a security. If there is any uncertainty, the agency recommends “ethics officials advise the employee to report transactions of that asset on periodic transaction reports if the value of the transaction exceeds the reporting threshold.”
